How it works:

CONTROL PROPERTY WITHOUT YOUR NAME BEING PUBLICLY AVAILABLE

NOTE : LIMITED SOLELY TO NEVADA REAL ESTATE

I am a Nevada attorney and my advice and practice is solely limited to property located in Nevada. If you are interested in property in any other state, you can retain me and I can retain an attorney in the other state for purposes of maintaining your anonymity.

PRIVACY IS A CHALLENGE

Maintaining privacy is difficult. The internet, social media, banking regulations, and taxing laws at the local, state and federal level all create an environment where public information is undermining individual privacy rights.
There are legal causes of action for invasion of privacy. These include (1) intrusion of solitude, (2) appropriation of name or likeness, (3) public disclosure of private facts, and (4) false light. But dealing with the litigation through the court system is incredibly expensive, time consuming and expensive. It is much better to avoid any conflict from someone disclosing your private information by keeping the information from the public records.

ATTORNEY CLIENT PRIVILEGE

Nevada law makes all communications between an attorney and his/her client confidential. Attorney-client privilege refers to a legal privilege is a doctrine that communications between an attorney and his or her client are secret. The privilege is asserted in the face of a legal demand for the communications, such as a discovery request or a demand that the lawyer testify under oath. The privilege belongs to the client, not to the attorney.
Although not absolute, the privilege is very strong with the only affirmative exception being to disclose client information that the lawyer believes is likely to result in reasonably certain death or substantial bodily harm. There are some permissive exceptions, such as when the client is in the process of committing or intends to commit a crime or fraudulent act, and the client communicated with the lawyer with intent to further the crime or fraud, or to cover it up. However, generally courts will hold that communications between an attorney and client are confidential.

TWO METHODS TO OWN OR CONTROL PROPERTY WITHOUT YOUR NAME BEING PUBLICLY AVAILABLE

I propose two methods to control or own property without your name being publicly available. I will solely address ownership of real property.
A. Asset Protection Trust and Limited Liability Company – Trust and LLC Privacy Plan
Create an asset protection trust, also called a Spendthrift Trust. Spendthrift Trusts protect assets owned by the trust from being attached by creditors of the individual beneficiaries. Nevada is the number one state for these
trusts for numerous reasons. A separate brief is available about Nevada Spendthrift Trusts.
Nevada Limited Liability Companies [LLCs] are separate legal entities that can be managed by either a member or a manager. Nevada law does not require disclosure of the identity of members of Limited Liability Companies [LLCs] if the LLC is managed by a manager.

Thus, the procedure is to form an Spendthrift Trust. Then fund the trust through the membership interest in a Nevada LLC. The Trust’s ownership interest in the LLC is not public record. Only the organizer and the manager of
the LLC is public record. The organizer and the manager of the LLC will be a Nevada attorney, whose communications with his/her client are privileged and cannot be disclosed. The LLC purchases property and holds title in the name of
the LLC. Anyone searching the public records can visit the Nevada Secretary of State’s website, which will disclose the attorney as the organizer and the manager of the LLC. No other information is publicly available.
Once the property is purchased, all utilities must be in the name of the LLC.

B. Long Term Lease

Property could be purchased by one entity or person, and a long term lease entered into by the person seeking privacy. Unlike deeds, leases are not recorded and so are not public record.

HIRE ME TO CREATE A SPENDTHRIFT TRUST, FORM AND MANAGE A LLC

Get your plan formulated before buying or taking any interest in real property because once your name is in the public records, it’s there permanently. The Trust and LLC Privacy Plan only works if the plan is implemented before
even entering into a purchase contract.
Once the Trust and the LLC are created, I can manage the LLC so your name never appears in the public records.

ONGOING MAINTENANCE

To promote confidential communication, I will create a new email address which should be used for all electronic communications.
Contact me to discuss pricing. Each client is unique and I will tailor a specific package for their needs. The minimum price for the Trust and LLC Privacy Plan is $5,000 to create the Trust and from the LLC with the Nevada Secretary of State, and $5,000 annually for me to be the manager.
Other property could be owned by the Trust, such as vehicles, jewelry, artwork, precious metals, etc. Again, each client is unique and each situation will have a specific plan created for the circumstances involved.

CONTACT ME

All communications are confidential.

BENJAMIN B. CHILDS, ESQ.
318 S. Maryland Parkway
Las Vegas, Nevada 89101
(702) 251-0000
Fax 385-1847
ben@benchilds.com




BENJAMIN B. CHILDS
ATTORNEY AT LAW

:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
318 SOUTH MARYLAND PARKWAY (702) 251 0000
LAS VEGAS, NEVADA 89101 FAX 385 1847
ben@benchilds.com

Nevada Laws on Spendthrift Trusts

Nevada historically has been considered a favorable jurisdiction for forming and maintaining a
trust. As one of the first states to pass legislation permitting the self settled spendthrift trust, or
domestic asset protection trust (DAPT) as it is sometimes identified, Nevada offers cutting-edge laws
in the areas of trust formation and administration. These progressive laws, coupled with an income-tax
free environment and relatively generous execution exemptions, have allowed the state to make its way
onto the short list of go-to states for estate planning and asset protection.1
To increase the flexibility of forming and administering a trust, as well as to enhance and
legitimize the asset protection features of Nevada laws, the legislature made significant revisions and
additions to its trust laws in the previous regular legislative session.2 The codification of these laws
has catapulted Nevada into the limelight of the trust industry anew, where it is again recognized on a
national level as a top-tier state in which to structure and administer a trust.3
In an effort to highlight the basis of this recent attention, the following is a brief overview of
the more notable laws and features that form the impetus for Nevada’s growing trust law.

Rule Against Perpetuities

In 2005, Nevada passed legislation that all but revoked the rule against perpetuities. As a
reminder, besides being the bane of all first-year law school students, the rule against perpetuities
limits the duration of a non-vested property interest, including those interests left in trust, so as to
prevent dead-hand control by individuals establishing such interests. The time period applicable to
Nevada’s rule against perpetuities is 365 years.4
Attorneys often use trusts to help clients shield inter-generational transfers of assets from
transfer taxes (i.e., the federal gift, estate and generation skipping transfer taxes) as part of a family’s
estate plan. These tax benefits continue for as long as the trust remains in existence. Because Nevada
law allows interests in trust to exist for up to 365 years, assets held through a Nevada-domiciled trust
agreement can experience ongoing transfer tax- free growth. As one of the 24 jurisdictions that has
either repealed its rule against perpetuities or extended the statutory period into near perpetuity,
Nevada has created an ideal environment for preserving property through long-term inter-generational
asset transfers.5

Virtual Representation

In the event a trust contains provisions for unascertainable beneficiaries (e.g., unborn children),
virtual representation statutes permit a court to allow for these rights to be represented without the need
for appointment of an attorney or guardian ad litem. In essence, Nevada law allows the interests of
such unknown or minor beneficiaries to be represented by other beneficiaries whose interests are
substantially similar and who have no material conflict of interest. NRS 155.140 has provided for
virtual representation in probate estates for years, but the 2009 legislature added a similar provision
applicable to trust administration. Nevada is among the minority of jurisdictions statutorily providing for virtual representation.6


Trust Protector Statute

The trust protector, or trust consultant as it is sometimes called, is a party to the trust agreement
who is appointed by the settlor to act as a check-and-balance alongside the trustee. Trust protectors
frequently are given the authority to remove and replace trustees, but the inclusion of such authority is
solely dependent upon how the relevant trust agreement is drafted. Trust protectors may also have
certain limited powers to amend a trust’s terms. The use of trust protectors is not a new development;
however, Nevada recently enacted legislation that
recognizes the legitimacy and authority of the trust protector office.7
While the 2009 legislature recognizes the position of a trust protector, and even suggests some
powers a trust protector might have, it leaves the specifics regarding scope of power and authority to
the complete discretion of the settlor. Having a statutory provision recognizing trust protectors and
establishing roles in which they may act allows the settlors of a trust to have the flexibility necessary to
ensure the trust’s proper administration and deal with unforeseen circumstances.

Decanting Provisions

Decanting is a statutorily-enabled action that allows a trustee of a trust to appoint assets from
one trust to another trust. Currently, only eight states, including Nevada, have decanting statutes.8
Some of the requirements for decanting under Nevada’s statute are that the new trust into which assets
are appointed must not include beneficiaries who are not beneficiaries of the original trust, and the
beneficial rights and property interests of the beneficiaries under the original trust cannot be reduced.9
Trustees can decant to a trust in order to modernize antiquated trust provisions or deal with
unforeseen changes in law. Other reasons a trustee may decide to decant trust assets to a new trust
include: improving administrative provisions, consolidating or separating out trust property, correcting
drafting errors and migrating a trust to a new jurisdiction better suited to providing for the
beneficiaries. Trust migration, or redomiciliation as it is sometimes called, typically occurs when a
trustee desires to take advantage of the laws of a different jurisdiction. Trust migration can be done for
tax and asset preservation purposes and can be carried out on either a domestic or international level.
Having the ability to change a trust’s situs or update provisions if ever necessary is likely to be an
important consideration for individuals hoping to achieve maximum flexibility and asset preservation
within their trust agreements.

Self-Settled Spendthrift Trust Statute

More than 10 years ago, Nevada became one of the first states to pass legislation allowing for
the formation of self-settled spendthrift trusts. Since the inception of the Nevada DAPT, other states
have followed suit.10 In general, NRS Chapter 166 permits individuals to protect assets from the reach
of their personal creditors and still derive personal benefit from such assets by transferring them into a
trust where at least one of the trustees is a Nevada resident, Nevada bank or Nevada trust company,
and where the settlors are not authorized to make distributions back to themselves.11 Assets are then
shielded from the reach of the settlor’s personal creditors once a specific seasoning period has run
(discussed below), provided the trust conveyance is not deemed to be a fraudulent transfer or wrongful
to the creditor.12
The self-settled spendthrift trust has been considered by some to be an instrument not serving
the public good because of its broad ability to protect one’s assets from creditors. While a discussion of
the moral or ethical implications of allowing an individual to form a trust and then benefit from the trust’s property while receiving protection from his or her creditors is beyond the scope of this article, it is important to note that the growing trend in states passing self-settled spendthrift trust legislation indicates a potential shift in public policy.
Unlike the laws of recent entrants to the DAPT arena, Nevada’s self-settled spendthrift trust laws have been on the books for over a decade. Furthermore, the legislation has been favorably amended in two separate legislative sessions.13 The most recent round of statutory development not only signifies renewed approval by the state’s lawmakers, but demonstrates a growing commitment to creating a legal environment that is conducive to progressive asset protection planning. Some of the more notable features of NRS 166 are as follows:
Two-year statutory seasoning period: Nevada has one of the shortest vesting periods of any DAPT jurisdiction (just two years). Once the two-year period has passed, the assets held in trust are protected from creditor reach. Creditors also have six months from the time of discovery or reasonable discovery to bring legal action against a transfer into trust; however, NRS 166 now provides that creditors shall be deemed to have discovered the transfer once the transferor publicly records the transfer with the county recorder or files a financing statement with the Secretary of State.14
Settlor can serve as trustee: Prior to the most recent legislative changes to NRS 166, there was much debate among the members of the estate planning community as to whether the settlor of a Nevada DAPT could also serve as a trustee of the same trust. Many thought having a settlor serve as trustee would defeat the trust’s ability to protect assets where the settlor was also a beneficiary. Now, however, with the passage of SB 287, the law makes clear that not only can a settlor of a self-settled spendthrift trust serve as a trustee, but it also explicitly provides that a settlor-trustee can hold and exercise any other power under the trust, including the power to remove and replace a trustee, direct trust investments and execute other management powers. Moreover, the new language in the statute
seems to allow a settlor-trustee to even make a distribution to himself, provided another person consents to such distribution.15
Fraudulent transfer requirement: Under the new language of NRS 166, for a creditor to bring an action against a transfer of property to a Nevada self-settled spendthrift trust, the creditor must prove the transfer was either a fraudulent transfer or “otherwise wrongful as to the creditor.”16 Furthermore, if a creditor proves the transfer of a certain asset to be fraudulent, that proof does not provide blanket evidence as to all other transfers or for all other creditors. Each creditor must make his own case for each asset.17
Adviser protection: Accountants, attorneys, investment advisers and other similar advisers to the trustee of a self-settled spendthrift trust are protected from legal claims by third parties, provided there is no “clear and convincing” evidence that the adviser “acted knowingly and in bad faith” in violation of state law and that such actions “directly caused” the damages suffered by the third party.18

No State Taxes on Income, Estates or Inheritances

Although the absence of state income, estate and inheritance taxes in Nevada is not a recent
development, from a trust perspective it is one of the most appealing aspects of doing trust business in the Silver State. Accordingly, the allure of a tax-free environment for trusts and other income-earning or assettransferring entities does not require an exhaustive explanation, except to say that Nevada is one of a small minority of jurisdictions that does not levy these types of state taxes.

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Charging Orders, State Exemptions and Other Related Laws

In addition to trust laws, Nevada has many laws not directly aimed at trusts which not only facilitate holistic estate and asset protection planning, but bolster overall trust-settling opportunities. For example, Nevada law provides for certain chargingorder- protected entities such as the limited partnership (LP), limited-liability company (LLC), and closely-held corporation. Nevada law protects the owners of such state-recognized entities from all forms of judicial remedies except that of the charging order.
The charging order is a remedy which allows a personal judgment creditor to attach nothing
more than an individual debtor’s distributional interest in the relevant entity. As such, a personal creditor is not able to attach the owner’s proportionate share of the entity’s assets, nor is such creditor afforded managerial or voting rights in the entity. Thus, with respect to the entity’s assets, the owner’s personal creditor is essentially forced to wait for the entity to make distributions to the debtor in order to satisfy any judgments.
Charging orders are intended to protect an entity’s non-debtor owners from being forced to accept the debtor’s creditor as a new partner. Many states have charging order laws, but not all such laws are created equally. Unlike Nevada, a large number of states do not limit a creditor’s remedial options to the charging order, in that they allow judicial liquidations, constructive trusts and other similar remedies. Furthermore, Nevada is the only state to extend charging order protection beyond the realm of LPs and LLCs so as to include corporations that qualify as closely-held companies pursuant to NRS 21.090 and 78.746.19
In addition to charging order protection, Nevada law provides for various favorable property exemptions from creditor attachment. Homestead and other statutory exemptions are some of the most protective of any jurisdiction. For instance, Nevada’s homestead exemption shields up to $550,000 of equity in a personal residence,20 and state exemptions protect up to $500,000 of money held in IRAs and qualified retirement plans and life insurance benefits to the extent premiums don’t exceed $15,000 a year.21
The laws of Nevada also provide for discretionary trusts, unitrust conversions, limited powers of appointment, private trust companies and directed trusts. Each of these statutory features provides added tools for better carrying out the intent of trust settlors.

Conclusion

The overall framework of Nevada trust law is catching the attention of the estate planning community on a national level with renowned estate planners consistently ranking Nevada in the top tier as a trust situs. Indeed, those persons who establish, administer and benefit from trusts agreements governed by the Nevada law enjoy superior flexibility and protection.

Endnotes

  1. Mark Merric and Daniel G. Worthington, Which Situs is Best? 149 Tr. & Est. 54 (Jan. 2010).
  2. S.B. 287, 75th Leg., (Nev. 2009), signed into law on May 26, 2009 and effective as of Oct. 1,
    2009.
  3. LISI Estate Planning Newsletter #1596 (Feb. 2, 2010).
  4. NRS 111.1031.
  5. Following is a list of perpetual and near-perpetual states: Alaska- 1,000 yrs. (Ak Stat.
    §34.27.051); Arizona-no RAP (Ariz. Rev. Stat. §14-2901A); Colorado-1,000 yrs. (Col. Rev.
    Stat. 15-11-1102.5); District of Columbia-no RAP (D.C. Code Ann. §19-904(10)); Delaware-
    no RAP (25 Del. C. §503); Florida-360 yrs. (Fl. Stat. 689.225); Idaho-no RAP (Fl. Stat.
    689.225); Illinois-no RAP (765 Ill. Comp. Stat. Ann. §§ 305/1– 305/6); Maine-no RAP (Me.
    Rev. Stat. Ann. tit. 33. § 101-A); Maryland-no RAP (Md. Code Ann., Est. & Trusts § 11-102);
    Missouri-no RAP (Mo. Rev. Stat. § 456.025); Nebraska-no RAP (Neb. Rev. Stat. § 76-
    2005(9)); Nevada-365 yrs. (Supra note 5); New Hampshire-no RAP (N.H. Rev. Stat. Ann. §
    564:24); New Jersey-no RAP (N.J. Stat. §§ 46:2F-9-46:2F-11); Ohio-no RAP (Ohio Rev. Code
    Ann. § 2131.09); Pennsylvania-no RAP (PSA § 6107.1 ); Rhode Island-no RAP (R.I. Gen.
    Laws § 34-11-38); South Dakota-no RAP (SD Stat. 55-1-23); Utah-1,000 yrs. (Ut. Code Ann.
    75-2-1203(1)); Virginia-no RAP (Va. Code Ann. § 55-13.3);Washington-150yrs. (Wash. Rev.
    Code§ 11.98.130); Wisconsin-no RAP (Wis. Stat. § 700.16); Wyoming-1,000 yrs. (Wyo. Stat.
    Ann. 34-1-139(b)).
  6. Supra note 3, at § 45.4, pg. 18.
  7. Supra note 3, at § 33, pgs. 9-10.
  8. Supra note 2.
  9. Supra note 3 at § 37, pgs. 11-14.
  10. See David G. Shaftel, Comparison of the Twelve Domestic Asset Protection Statutes, 34
    ACTEC JOURNAL 293 (2009).
  11. NRS 166.120
  12. NRS Chapter 112.
  13. See generally supra note 3; and S.B. 420, 74th Leg., (Nev. 2007).
  14. NRS 166.170.
  15. Supra note 3, at § 58.3, pg. 27.
  16. Supra note 3, at § 36, pg. 11.
  17. Id.
  18. Supra note 3, at § 60, pgs. 28-29.
  19. See generally Cooper, Jeremy K. and Grant, David M., Nevada Takes the Lead: Charging
    Order Protection is Now Available for Small Corporations, 30 Communiqué (2009)28.
  20. NRS 115.010
  21. NRS 21.090(1)(k) and (r).